This discussion describes the why, what, and of handling for value in companies that are privately held. Public companies continue to manage for value, a trend that is now pushing its way inexorably into companies that are privately held. We discuss the dynamics that are creating a worth-direction imperative for these firms.
Second, we provide a signaling model to assist management of privately held companies in deciding whether to accentuate (a) sales increase, (b) the spread between return on invested capital and the weighted average cost of capital, (c) decrease in the cost of capital, or (d) some combination of these three. The key-value-driver model supplies guidance in addressing questions for example: Do we have the right to grow? Should we improve profit operation before we grow? We also describe the best way to obtain the information required to use the model. We present some important but under-utilized tools based upon transactions cost and strategic cost management theories to assist executives in managing for value and discuss when to use these tools within a strategic context.
PUBLICATION DATE: November 15, 2008 PRODUCT #: BH305-PDF-ENG
The New Value Imperative for Privately held companies The Why, What, and How of value Management Strategy Case Study SolutionThis is just an excerpt. This case is about STRATEGY & EXECUTION
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